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Sims Flop Dogs Game Developers

Sony Online will be pushing its soon-to-be-released PlanetSide this year at E3. It's a space-based epic, the first multiplayer game that is a first-person shooter.

Sony

Massive multiplayer online games will get some heavy buzz at this week’s Electronic Entertainment Expo in Los Angeles.

The buzz will be darker after a disappointing year for many high-profile launches. Languid sales follow the much-ballyhooed The Sims Online, a darling of last year’s show. And Sony Online and LucasArts’ highly anticipated Star Wars Galaxies was delayed. Such virtual worlds were to be the great white hope of the video game industry.

"On the E3 hype meter, last year these games were an eight or a nine,” says Mark Jacobs, president of Mythic Entertainment, whose Dark Age of Camelot was released in 2000 and has 230,000 active subscribers. "This year it’s still going to be a nine, but it’s a lot more negative."

Industry analysts and insiders agree that the mood could turn a bit more positive once attendees actually start looking at the games on display, if only because developers and publishers will be showing or discussing multiplayer games involving hot entertainment franchises.

Among the biggies, Vivendi Universal will be touting online projects surrounding Lord of the Rings, the Marvel Comics universe, and its hugely successful Warcraft franchise.

Sony Online will be pushing its soon-to-be-released PlanetSide, a space-based epic and the first multiplayer game that is a so-called first-person shooter. The company also has a follow-on to its hugely successful medieval role-playing game EverQuest. And Star Wars Galaxies will be released in the fall of this year rather than in April when it was planned.

Still, disappointment surrounding The Sims Online has been a reality check for an industry that had hoped subscription-based multiplayer games would solve two problems.

The first is to free the game industry from its dependence on selling boxed products at retail for PCs and consoles such as Sony’s Playstation 2 and Microsoft’s Xbox. Subscription-based online games that build substantial audiences – paying as much as $13 a month – are gifts that would keep on giving, month after month, year after year.

Second, the industry was closely watching The Sims Online to see whether Electronic Arts could expand the audience for online games beyond the mostly young male audiences. "Guys without dates," as they are referred to in the industry, have heretofore been the primary population of gamers. The hugely successful The Sims franchise has an audience that is largely female.

The Sims Online was released in December of last year amid lofty expectations. With earlier versions of The Sims having sold better than any game in PC history – and now doing a booming business on consoles – EA executives openly discussed reaping as many as 1 million active monthly subscribers globally for the online version. That would far outstrip the 470,000 subscribers to EverQuest, the most popular virtual world to date.

EA backed up its bet by spending as much as $20 million on the project, while committing a large team of A-list talent from its Maxis development studio.

Nearly six months later, The Sims Online has sold 125,000 copies retail, has been discounted from $50 to as low as $20 on Amazon and has 97,000 active subscribers.

Over the past year, EA has faced other disappointments with slow sales and sign-ups for its multiplayer online space opera, Earth and Beyond. An online subscription-based homage to muscle car culture, Motor City Online, will be shut down this summer.

The string of misses led EA to fold the tracking stock of its former online division, EA.com, in March, back into the parent company. Over it's three-year life span, losses for the division were reported to be close to $300 million.

Industry analysts point to a number of factors for The Sims Online’s disappointing performance. EA itself inflated expectations. The game’s target demographic of so-called casual gamers is still reluctant to pay a monthly subscription fee of $10, let alone give out credit card information over the Internet.

Analysts also noted that consumers might not be responding well to paying individual subscriptions for single online games, but might react better to cable TV-like pricing in which they get access to a number of offerings for a flat fee.

Investment analyst Michael Pachter of Wedbush Morgan Securities in Los Angeles believes it was simply the wrong game for the wrong demographic. He says the universe of online gamers willing to pay subscriptions is very narrow. It has principally been in core gamer niches such as medieval-fantasy role-playing games that have upwards of 700,000 subscribers in the U.S. and Europe.

"The Sims Online was flat out the wrong game," said Pachter. "They took a very popular franchise that’s a single-player game in which you play with dolls, and when you play with dolls, they follow rules and behave in predictable ways. With The Sims Online, you’re playing real people, and real people don’t behave the way you’d expect them to.”

EA spokesman Jeff Brown said the disappointment surrounding The Sims Online is not a function of a market that's not ready or a demographic mismatch.

"The people who make The Sims believe that its execution isn’t what it should have been when it was launched," he said. In other words, The Sims Online wasn’t a very good game.

Since the launch, the development team for The Sims Online has been scrambling to add new content and features to improve the experience, including the enhanced capability for users to create custom content such as personalized clothing and homes, Brown said.

Despite its recent string of failures and disappointments, Brown added that EA remains committed to multiplayer games and has no plans to pull the plug on The Sims Online. He said the mass market is ready for the right product with the right execution. EA's successful medieval role-playing game, Ultima Online, has 250,000 active subscribers.

"Someone is going to create a successful persistent world based on something other than medieval fiction," Brown said. "The lesson of (The Sims Online) to the rest of the industry is that it’s going to be much harder and more expensive to build persistent worlds, and that anyone who tries to do it should not tread lightly."

Others say the industry needs to build the universe of subscription-based virtual worlds from the ground up by sticking to established genres and offering experiences that seem like natural transitions for core gamer audiences. Most gamers now play standalone games or networked and online games for free.

Breaking that mold is what Sony is attempting with PlanetSide, which launches May 20. It’s a first-person shooter along the lines of Doom, Quake and Half-Life. It aims to transcend the vacuous, violent fragfests such games have become by offering features that allow players to build a recurring status and a set of skills over time.

"(One) reason why people get into this space is that if you have a successful product, the money is ridiculous," said Scott McDaniel, vice president of marketing at Sony Online Entertainment. EverQuest has a subscriber base of 470,000 people at $13 a month, according to McDaniel – that's $73 million annually, not including what subscribers pay for the discs they need to play the game.

"Grand Theft Auto 3 sold 4 million copies at a wholesale price of $40 (about $160 million), but that’s a one-shot deal. I wouldn’t complain about that business model, but how many games are there like that out there?"

The virtual world projects that seem to be affected by the disappointing performance of The Sims Online are those in development long before EA’s virtual world launched last year that are aiming at the same mass market.

These include Disney’s soon-to-be-released Toontown for kids, as well as Linden Lab’s Second Life and There (by There, the company).

"My guess is that none of those folks have had a solid bowel movement since the situation around The Sims Online became apparent in January," said one industry wag.

Suneel Ratan is a former Electronic Arts vice president who left the company in 2001.